In a bid to provide extensive booster to its retail banking business, private sector lender Federal Bank has gone for revival of its wholly owned subsidiary.
The bank's subsidiary has been revived in a situation when regulator Reserve Bank of India is not allowing banks to come up with subsidiaries to run businesses which are can be operated through bank branches itself.
However, a senior official of Federal Bank said, "We are aware that RBI does not want banks to set up separate subsidiaries for businesses that they can do through their own bank branches. But it is different in our case. The subsidiary was formed sometime back. We are just adding new lines to the existing businesses. The regulator has not raised any objection."
RBI has already rejected plans of lenders like South Indian Bank, Bank of India, Lakshmi Vilas Bank etc to set up subsidiaries to carry on various retail loan businesses like gold loan, home loan etc.
"Unlike other banks, we did not apply for a new subsidiary," said another official.